Tax news

The Social Security Administration has announced the new wage base for application of Social Security tax withholding, effective January 1, 2002. The taxable wage base will increase 5.6% from $80,400 to $84,900.This increase will have the effect of raising the amount of Social Security tax paid by individuals making at least the maximum in Social Security taxable wages by $279, bringing the total tax to $5,263.80.

The IRS has issued Notice 2001-70 on Disaster Relief From Application Of Mid-Quarter Convention in Tax Code Depreciation Rules. In this notice, the IRS relieves taxpayers from using the mid-quarter convention for computing depreciation expenses.Recognizing that since the September 11, 2001 terrorist attacks many taxpayers may have encountered difficulty completing acquisitions and placing in service of property in accordance with plans made earlier in the year, the IRS has decided to soften the rules regarding the mid-quarter convention.

For the past eight years, the IRS has published articles of interest to the tax exempt bond community in its annual publication, "Exempt Organizations Continuing Education Technical Instruction Program."Now the IRS is taking its program of disseminating information one step further and launching a continuing professional education program which will meet the technical needs of the IRS's Tax Exempt Bonds personnel and the municipal bonds community in general.

The IRS is searching for accountants who are interested in becoming IRS Criminal Investigation Special Agents. Job openings for 300 new agents have been announced and applicants may apply online.Candidates selected for the special agent positions will attend a comprehensive training program at the Federal Law Enforcement Training Center (FLETC) in Glynco, Georgia. Training begins with a one-week orientation program sponsored by the National Criminal Investigation Training Academy.

In an attempt to step-up collection of past due income taxes, the IRS has announced that it will begin withholding up to 15% of Social Security benefits from certain taxpayers.An estimated 232,000 taxpayers currently receiving Social Security benefits have unsettled income tax accounts. These taxpayers owe an average of $1,350 each. The program will not only target taxpayers currently owing back taxes, but will go forward to collect outstanding income taxes in the future by withholding Social Security benefits.

The Electronic Federal Tax Payment System (EFTPS), the program that allows business and individual taxpayers to make electronic tax payments by telephone and Internet, offers a program whereby taxpayers can make quarterly estimated tax payments electronically. Those quarterly payments can be set up for the year and payments will be made automatically on the dates you specify.The EFTPS provides an option for online users of the service to review tax payment history and print out a confirmation of payment.

Twenty-five year old Barry A. Johnson, of Virginia Beach, VA, has been accused of creating false tax returns. Lots of false tax returns.At last count, Mr. Johnson has been found to have used the names and Social Security numbers of other people to file 174 tax returns (presumably in addition to his own, legitimate tax return), hoping to receive a total of $270,000 in tax refunds. The actual amount of refunds received by Mr. Johnson is approximately $40,000.Mr. Johnson has been filing tax returns on behalf of others since 1998 and may face up to five years in prison if he is convicted.

The Internal Revenue Service office in Covington, Kentucky was closed Tuesday after a mailroom employee said she saw a cloud of white powder come from an envelope after it was opened.The office was closed for six hours. The mailroom employee who opened the envelope was decontaminated by hazardous materials personnel and then taken to a nearby hospital for observation, however the employee did not exhibit any signs of illness.

Michigan Governor John Engler signed legislation that allows Michigan to join 19 other states in the Streamlined Sales Tax Project, a multi-state tax simplification pact that will ease the rules for sales tax collection on Internet sales.

Larry Gray, President of the National Association of Tax Professionals (NATP), played a key role in voicing the concerns of tax professionals with regard to the IRS's effort to restructure the Offer in Compromise (OIC) program.Mr. Gray met with senior IRS personnel, including Robert Wenzel, IRS Deputy Commissioner and Kevin Brown, Assistant to the Commissioner, in Washington DC, to discuss the cost of streamlining the collection process and improve communications with the IRS. "Our goal is to improve the communications with the Service.

The IRS-sponsored Q&A forum, Tax Talk Today, is now offering CPE credit for those who view the archives of previous sessions.Participants may view the archived programs online or may order a video of past sessions. Video tapes of previous sessions sell for $24.95. To earn credit, a test and evaluation form must be completed.Prices for the self-study CPE are $25 per credit hour, however volume discounts are available.

House Bill H.R. 2975, the Patriot Act of 2001, if made into law, will authorize disclosure of taxpayer information to the Justice and Treasury departments, federal law enforcement, as well as federal intelligence agencies that are investigating terrorist organizations and related activities.Some tax practitioners have voiced a concern that such a bill will weaken important restrictions on disclosing tax information.

The Internal Revenue Service continues its leap into the 21st century with the acquisition of Stan Ratcliffe, a seasoned manager and executive who has worked for Sabre Inc., Andersen Consulting (now Accenture), Electronic Data Systems Corp., Sprint, Northern Telecom, and Digital Equipment Corp.Mr.

The IRS has issued final regulations on the requirements for excise tax returns, payments, and deposits. These regulations are effective for calendar quarters beginning after September 30, 2001 and they relate to taxpayers who file Form 720, Quarterly Federal Excise Tax Return. The changes will be reflected on the fourth quarter Form 720 and its instructions.Filing dates. All Forms 720 are to be filed by the last day of the month following the quarter for which the return is made. The returns are due by April 30, July 31, October 31, and January 31.

The IRS allows an itemized deduction for certain unreimbursed losses resulting from casualties and thefts. When a disaster loss occurs in an area that has been designated by the President of the U.S. as a Federal disaster area, as is the case in the five boroughs of New York and Arlington, Virginia, due to the recent terrorist attacks, individuals who suffer casualty losses stemming from the disaster may take certain steps to rapidly recover tax benefits.

H.D. Vest Financial Services will no longer offer its free online tax preparation services, the company stated in a recent press announcement. Those who filed their tax returns using the free online service will continue to have access to their online information for three years after the filing date of the tax return. The free service was created with the hope of driving business to the other financial services offered by H.D.

The Michigan House of Representatives voted yesterday to allow Michigan to join other states in creating a uniform, nationwide system of collecting and enforcing sales tax on online sales. The bill passed 57-50, and now heads for the Senate.Conservative Republicans voted against the bill and spoke out after the vote. "The people don't want this policy. Government wants this policy," explained Rep.

The National Association of Manufacturers (NAM), the nation's oldest and largest broad-based industrial trade association, is urging Congress to consider accelerating the tax cuts that were made into law last year.NAM President, Jerry Jasinowski, explained that the nation was on the brink of recession before the recent terrorist attacks, and cautioned that those attacks likely pushed the economy into a recession.

The Internal Revenue Service has announced the establishment of a special toll-free telephone number for taxpayers whose ability to meet their federal tax obligations has been affected by the September 11 terrorist attacks. People with tax issues related to the attacks can call 1-866-562-5277.&quot;This special number will help people cut through the red tape and get their tax questions answered quickly,&quot; IRS Commissioner Charles O. Rossotti said. &quot;We don't want lingering tax questions to burden anyone during this challenging time.&quot;

The last of the tax rebate checks that were included in the first phase of the tax rebate program have been mailed. Phase One of the rebate program included sending rebate checks of, at most, $600 for married filing jointly taxpayers, $500 for head of household taxpayers, and $300 for single taxpayers, to taxpayers who had filed their 2000 tax return on a timely basis.